An Educational Guide for Families. Capture the present, plan for the future.

Transcription

1 An Educational Guide for Families Capture the present, plan for the future. Estate insure Planning invest Strategies retire

2 Trust is often the foundation of a strong family. A trust is often at the center of a sound estate plan. An estate plan with a properly drafted Will and trust can help ensure that your estate is distributed and used in the manner you intend, and may also provide significant tax savings. Trusts may also provide liquidity to pay estate taxes upon your passing and provide income for your family. The MassMutual Trust Company, fsb as corporate Trustee can help implement your estate plan, and provide confidence that your intentions are faithfully carried out. The MassMutual Trust Company is staffed by a team of experienced professionals that can work with your team of advisors to assure that the interests of you and your family are carefully considered in establishing and carrying out the plans you have made for your family.

3 Have you thought about whom you would trust with the plans you have in store for your family? The MassMutual Trust Company can help. Choosing The MassMutual Trust Company as your Trustee may provide advantages that friends and family cannot provide as a fiduciary. Usually, professionals perform their jobs at a higher level than amateurs. Would you take golf lessons from your sibling instead of the club pro? More than likely the professional has better resources, the right techniques and more experience. The same holds true for trust administration. The MassMutual Trust Company has experience with the legal duties and obligations of a trustee that most laypeople lack. The MassMutual Trust Company is also familiar with required Probate Court filings and procedures and the requirements of properly filed estate and fiduciary tax returns. A relative or trusted friend may not have the time necessary to learn how to properly carry out their duties, or may not want the responsibility. Sometimes, appointing family members to serve as your trustee can create family tensions that may not arise when a corporate Trustee is appointed. The investment management of trusts may also be challenging to the layperson. Even individuals knowledgeable about tax accounting and income tax issues are often unfamiliar with trust accounting and the Principal and Income rules applicable to trusts. They may also be uncomfortable with dealing with the potentially conflicting interests of multiple beneficiaries. The MassMutual Trust Company s Trust and Investment Officers have the knowledge and expertise to see that the planning goals you established in your Will and trust are accomplished and are not compromised by personal or emotional considerations, or by unfamiliarity with the fine points of Trust Law. You ve always been there for them. To coach soccer and little league. To pick them up when they fell. To offer sound advice when they needed direction. You ve provided for them. Ice cream on a hot day. Help with homework. A college education. You ve worked so hard. To achieve your success. To live your life on your terms. To achieve your philanthropic goals. To protect the ones you love the most. The time and resources necessary to faithfully and properly fulfill responsibilities can be overwhelming to the layperson, especially without the experience and record-keeping systems offered by a professional Trust company. Offering a team of Trust Officers with an average of 20+ years of experience as professional fiduciaries, The MassMutual Trust Company has administrative capabilities and investment resources that few individuals can match. This expertise in trust administration is available to serve as your Trustee. 1

4 Acting in the best interest of your beneficiaries An understanding of the effort and complexities involved in trust administration is critical to making a good decision as to whom you should appoint as your Trustee. Choosing the right Trustee is not an easy decision, and it shouldn t be a leap of faith either. To ensure that your intentions are carried out and that the best interests of your beneficiaries are protected, you should select a Trustee with: Unquestioned ethics and integrity; Sound judgment and discretion; Strong fiduciary experience and solid trust administrative capabilities; Commitment to carrying out the plans you have made in your Will and trusts; and Sometimes there are complex investment responsibilities imposed under the Uniform Prudent Investor Rule and related statutory standards that a trustee must fulfill. A trusted family member may be a savvy investor but, with the best of intentions, lacks the skill and patience for the meticulous record keeping essential to timely and accurate trust accountings and tax returns. In such cases The MassMutual Trust Company can help. You don t have to find all these skills in one person. You can find it all in one trust company. The MassMutual Trust Company can serve as your Trustee, attaining the objectives of your trust while offering superior customer service to your beneficiaries at the highest of professional standards. The investment knowledge and resources to properly manage trust assets. 2

5 What type of trusts does The MassMutual Trust Company administer? Investment Trust The Investment Trust, also known as an Agency Account, is a viable option for those who feel they need the guidance of a professional Trustee with administration of assets and record keeping, or to simply consolidate their investment holdings. The Investment Trust provides for ongoing custody and professional management of investments. The grantor may require withdrawals, as well as terminate the arrangement at any time. Revocable Living Trust By using a Revocable Living Trust a donor may transfer beneficial ownership of assets held in trust while retaining the right to change or revoke the arrangement. In addition to making the services of a professional Trustee available to manage trust assets, Revocable Living Trusts may also minimize an individual s probate estate (but not estate tax), and avoid the lack of privacy that may accompany a Probate proceeding. Charitable Remainder Trust A Charitable Remainder Trust allows a charitably inclined individual to contribute assets in trust to a favored charity, generating a current income-tax deduction while retaining a right to receive an annual distribution from the trust. A Charitable Remainder Trust can be established for a term of years (not more than 20), for the life of the donor or joint-and-survivor lives of the donor and spouse. The trusts may also be useful in transferring appreciating assets out of the donor s taxable estate which in turn achieves, a subsequent reduction in estate tax liability. There s a variety of Charitable Remainder Trusts. The most commonly used variations are the Charitable Remainder Annuity Trust (CRAT), and the Charitable Remainder Unitrust (CRUT). Trusts Under Will Also known as a Testamentary Trust, a Trust under Will takes effect upon death, at which time it becomes irrevocable. You may alter this type of trust at any time prior to death through a codicil to your Will. A Qualified Terminable Interest Property Trust (QTIP) is one example of a Trust under Will that is commonly used in estate planning. Estate Settlement The MassMutual Trust Company offers Estate Settlement and Probate Services. As the Executor or Administrator of an estate, The MassMutual Trust Company will collect, distribute and manage estate assets according to the terms of the Will and/or trust in an efficient and timely manner, and will file such Probate Accountings and Estate and Fiduciary Tax Returns as may be appropriate. The MassMutual Trust Company will also serve as Agent for Executor or Agent for Administrator, performing these functions on behalf of the Executor. One attractive feature offered is a bill paying service. You can have certain bills arranged to be paid from the assets in your trust. Irrevocable Life Insurance Trust A properly drafted Irrevocable Life Insurance Trust (ILIT) can ensure that the proceeds of an insured s life insurance policy are excluded from his or her taxable estate. In many cases this long-standing and well-tested technique can result in significant estate tax savings, as well as protecting the proceeds from the claims of the Beneficiaries creditors. ILITs are sometimes used to provide liquidity at the time of death which may be used to pay estate taxes so other assets do not need to be sold to cover the estate taxes due. 3

6 Place your trust with The MassMutual Trust Company, fsb The MassMutual Trust Company. Experience. Confidence. Trust. For more information on The MassMutual Trust Company, fsb and the services they can offer you, visit MassMutualTrust.com, contact your financial professional or contact the Trust Company directly at with questions or inquiries. Put your trust in The MassMutual Trust Company, fsb. The right trust can provide estate planning flexibility and can be customized to accomplish a wide array of objectives. However, a trust may be only as effective as the Trustee who manages and administers it. A Trustee has significant responsibilities involving both the fiduciary laws and the terms of the governing instrument. When it comes to selecting a Trustee, you must be sure that the entity/person you choose has both the commitment and the capabilities to perform the fiduciary responsibilities required. Some of the tasks include: Safekeeping of assets; Professional asset management; Timely notice to all beneficiaries; Periodic trust accountings; and Accurate tax reporting and filing of fiduciary tax returns. Experience is confidence and confidence is trust. With The MassMutual Trust Company, you get the experience and can have the confidence that your trust is administered by a highly experienced team of trust professionals who offer: Superior customer service; Years of experience in trust and fiduciary administration; Direct personal access to your dedicated Trust Officer (and not a call center queue); and A dedicated investment officer solely focused on The MassMutual Trust Company. 4

7 The MassMutual Trust Company, fsb. Experience. Confidence. Trust. 5

8 The MassMutual Trust Company, fsb is a federal savings bank chartered by the Office of the Comptroller of Currency to provide discretionary and nondiscretionary trust and fiduciary services in all states. The Trust Company does not engage in banking activity (take deposits, make loans, give mortgages, etc.) and does not sell products. Our business activity is limited to providing trust and fiduciary services. The MassMutual Trust Company is a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company Massachusetts Mutual Life Insurance Company, Springfield, MA All rights reserved. MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. TC C: